Insurance policy limits a fact of life

Brad and Belinda-Jayne Penrose had insurance when it mattered most. Picture: Dean Martin Source: National Features

THINKING your health insurance provides you with the same coverage as life insurance is not uncommon.

New data from life insurance company TAL found one in six Australians (17 per cent) believe the two types of insurance provide similar protection.

Financial Services Council chief executive John Brogden says Australians should be "forgiven" for being confused between the two.

"Health insurance will pay for your surgery if you're sick but it won't pay your salary if you're off work for six months," he says.

There are different types of cover that fall within the life insurance umbrella:

Death cover pays a lump sum to your beneficiary if you die.

Total permanent and disability insurance pays a lump sum if you are injured or disabled.

Trauma insurance pays a lump sum if you are diagnosed with a specified life-threatening illness or injury.

Income protection insurance covers you if you are sick or injured and cannot work.

The survey that quizzed more than 1200 people found 47 per cent of respondents do not have enough money or say it's too expensive to take out life insurance.

TAL Group chief executive Jim Minto says cost of living pressures are squeezing budgets even tighter.

"There is an enormous amount of pressure on household affordability in Australia ... people are challenging their budgets for almost everything," he says.

Belinda-Jayne Penrose, 23, who works in sales and marketing, says her dad suggested she get a form of life insurance - income protection cover - when she started working full-time.She says her father's advice was a godsend.

"At the time I didn't think I'd need it, I was only 17," Ms Penrose says.

"But there were two times when I had serious illnesses and I needed to claim on it, and we had a mortgage, so we definitely needed that money. It took a lot of stress off."

Her premium cost her about $30 a month.

Ms Penrose took about a year off work and says the insurance cover helped pay her medical bills and mortgage.

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Minister's insurance a matter of policy

Federal Health Minister Tanya Plibersek uses the privatehealth.gov.au website. Picture: Tim Hunter Source: News Limited

Christopher Zinn explains why you would register with One Big Switch and look at your health insurance options.

THE number of people using the official private health insurance comparison website has soared by 55 per cent in a year, as hundreds of thousands attempt to cut the cost of their cover.

The number of "unique visitors" to privatehealth.gov.au has grown from 315,000 to 485,000. Federal Health Minister Tanya Plibersek told News Limited that she had used the site to compare her own family's insurance and discovered policies providing similar coverage varied in price from $200 to $420 per month, meaning there was the potential to save thousands of dollars annually.

"That's a huge difference for your average family across the course of a year," Ms Plibersek said.

The minister found that her family's policy offered some of the best value for money on the market, which gave her peace of mind.

She implored people who had not reviewed their insurance in some time - as well as those who were seeking cheaper or better cover - to use the free comparison service.

"You wouldn't buy the first fridge you saw, or car or house, and the same goes for private health insurance," Ms Plibersek said. "And the good thing about this site is they are not trying to sell you anything."

Shaun Gath, CEO of the industry regulator, the Private Health Insurance Administration Council, said privatehealth.gov.au was "a lolly shop for consumers".

But awareness of the site was relatively low, he said.

Ms Plibersek urged insurers to compete more on price and product - "that's where I would like to see the real competition" - rather than to produce the most attractive TV advertisement.

Ms Plibersek also strongly endorsed the Big Health Insurance Switch campaign - a partnership between News Limited and consumer network One Big Switch.

Save yourself: Join One Big Switch

In just 11 days nearly 60,000 people have joined the campaign by registering their interest in receiving an offer of discount health insurance. The campaign also aims to increase awareness about the need to shop around for cover.

"I think that it is terrific for people to have a look at whether they are getting the best value for money with their private health insurance," Ms Plibersek said.

And in response to News Limited's recent report that privately insured patients in public hospitals could be running up a taxpayer-funded treatment bill of nearly $600 million a year, Ms Plibersek said there was a "need to be careful" about people "taking our private hospital cover and not using it when they could and should be".

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